Barclays' appointment of Bob Diamond stirs call for banks break-up | Business | The Guardian Barclays' appointment of Bob Diamond stirs call for banks break-up Promotion of investment arm's supremo to chief executive suggests sector is ignoring government pressure to reform Outgoing Barclays chief executive, John Varley, left, Bob Diamond, centre, and Barclays chairman, Marcus Agius, at Canary Wharf. Photograph: Daniel Lewis/PA Tuesday 7 September 2010 16.30 EDT First published on Tuesday 7 September 2010 16.30 EDT Share on Messenger Close The business secretary, Vince Cable , today expressed concern that Bob Diamond's appointment as chief executive of Barclays showed the banking sector was not taking the threat of break-up seriously. Cable is overseeing an independent commission considering whether high street banks should be split off from their "casino" investment banking operations. Sources close to the Liberal Democrat minister said he felt the move to install Diamond, a high-profile investment banker who has taken home £75m in the last five years, at the top of Barclays vindicated the government's decision to set up the commission, which is chaired by Sir John Vickers.

Although Diamond and other members of the Barclays board insisted that they were not pre-empting the outcome of the commission, due to report next year, the bank has previously warned that it is considering whether to move out of the UK because of the Vickers inquiry. The 59-year-old American, who has been with Barclays for the last 14 years, was described as the "unacceptable face of banking" by Cable's predecessor, Lord Mandelson. He will replace the current chief executive, John Varley, at the end of March. Tonight he said that although Barclays was committed to the so-called universal banking model – with investment and retail banking in one organisation – he was also "respectful" of the commission. The commission, which includes a former Barclays chief executive, Martin Taylor, has met twice and later this month is expected to set out an "issues paper," which is intended to form the basis for hearings to be held in public and private about whether breaking up the banks would reduce the risk of another taxpayer bailout of the system. The Lib Dems were vocal about the break-up of banks such as Barclays, HSBC and Royal Bank of Scotland before the election and the party's treasury spokesman, Lord Oakeshott, kept up the pressure.

"Diamond, with his £20m bonuses, is the unacceptable face of this bonus-driven banking," Oakeshott said. "This highlights the need to break-up and de-risk the British banking system." Meanwhile, HSBC also faced upheaval at the top, when the chairman, Stephen Green, was named by Cable as the next trade minister. Green has also defended the universal banking model and only last week the head of HSBC's investment bank, Stuart Gulliver, warned that the bank might reconsider its London headquarters if the commission recommended a break-up. Diamond's appointment prompted fury from union leaders, as the scale of the taxpayer bailout of the banking system has led to lengthening dole queues and severe cuts to public spending. Paul Kenny, the GMB general secretary, said: "These are the bankers who caused the recession sticking two fingers up at the taxpayers who rescued them. This is about as insulting and divisive as it gets." Although Barclays survived the banking crisis – sparked two years ago next week when Lehman Brothers collapsed – without direct injections of taxpayer cash, it has admitted it benefited from the general support provided to the sector from central bank liquidity. The chancellor, George Osborne, was more conciliatory than the Lib Dems.

He said he was looking forward to co-operating with the new Barclays chief and voiced scepticism about a "Robin Hood" tax on the big banks, saying that the "practicalities are enormous". Speaking in Brussels after a meeting of EU finance ministers, Osborne said it was up to Barclays' shareholders to decide who should head the bank. "I very much look forward to working with Bob Diamond on issues of mutual concern," Osborne said. "I want London to be a competitive place to do business. I also want to make sure the British taxpayer is protected … from the systemic risk posed by the big banks." Varley's departure and Green's resignation mean that in the two years since the banking crisis the bosses of all but two of Britain's big banks have been replaced – the exceptions being Peter Sands at Standard Chartered and Eric Daniels, at Lloyds.

Pete Hahn, a former investment banker lecturing in finance at Cass Business School, saw the appointment of Diamond as a challenge to the government: "Diamond has been promoted to stand his corner [against a break-up]." Barclays' investment banking arm generated more than 80% of the £3.9bn profits the bank reported in the first six months of the year, prompting concern that Barclays had already become a full-blown investment bank after acquiring the Wall Street operations of Lehman a year ago. The City has been rife with speculation that Barclays is considering splitting off its investment bank to be based in Wall Street, leaving its high street banking business to be based in the UK. A major shareholder said that the banks' share price was being depressed by the universal business model. "It would be interesting to see what would happen if the investment bank was broken off. The market was never very keen on the valuation of its earnings." Another shareholder, however, insisted Barclays could not operate if it broke up its businesses.

Libor scandal: Bob Diamond resigns as Barclays chief executive | Daily Mail Online Barclays board begins fight to claw back Bob Diamond's £22.9m share package as it's revealed Mervyn King 'gave him final push' Memo from Barclays implies Bank of England knew about Libor-rigging scam Bank of England governor and Financial Services Authority put pressure on bank to force the chief-executive out, it is claimed Mr Diamond to appear before Treasury Select Committee tomorrow Barclays banker Jerry del Missier ordered staff to lower the Libor rate after misunderstanding instructions from Mr Diamond Barclays chairman Marcus Agius says he has known about Libor fixing for the last TWO years Mr Agius says Mr Diamond, 60, resigned after 'something snapped' last night Mr del Missier, the chief operating officer, also resigns from bank Shareholders will attempt to claw back 13.2million shares owned by Mr Diamond - leaving him with 'just' a year's salary worth £1.35m Barclays share price falls 0.8% today following developments to 167p MPs will vote tomorrow on plans to set up a full judge-led inquiry into the bank rate-rigging scandal Tarnished Diamond back in the rough | Irish Examiner T

arnished Diamond back in the rough Saturday, April 14, 2012 By Kyran Fitzgerald Bob Diamond, the chief executive of Barclays Bank, has painted himself as the ultimate self-made man, rising from nothing to lead a bank with £33bn in assets.

But all that glisters may not be gold for the banker, says Kyran Fitzgerald His name is Diamond, Bob Diamond, and he is a fully fledged Master of the Universe; the chief executive of Barclays Bank, no less. Barclays is a name to conjure with, with assets in excess of £2,000bn and revenues of £33bn (€29.6bn) in 2011. It is a household name in banking, tracing its origins back to the 18th century. This week, Diamond is in the news for all the wrong reasons. A number of bank shareholders have indicated they may vote against the generous pay package — almost £17m in total — which the bank remuneration committee has proposed to set aside this year for the bank’s boss. Included in the package is a commitment to meet a US tax bill of almost £6m incurred as a result of Diamond’s move from New York to London in order to assume the reins at Barclays HQ. Several million pounds each are being offered to two senior colleagues, including one Rich Ricci (you really could not make this up).

Diamond is not the first leading banker to feel the heat and he won’t be the last. His counterpart at RBS, Stephen Hester, was forced, under public pressure, to waive a hefty bonus earlier this year. The Lloyds boss Antonio Horta Osorvo has also come under fire. In fact, banker bashing has taken over from fox hunting as the leading bloodsport in Britain. Just yesterday UK Shareholders Association director Eric Chalker, whose organisation represents retail investors and has about 1,000 members, said: “It has become a truism that senior bank pay is grossly excessive and, some would say, immoral.” In Ireland, caps on the pay of bankers running our bedraggled nationalised entities have taken a lot of the fun out of the chase. Our favourite panto villains emerge occasionally from the shadows to appear amid catcalls at AGMs, but the baying grows more muted as the years grind on.

In the City of London, however, big bucks are still the order of the day as privatised institutions proceed merrily along, recreating much of the buccaneering atmosphere of the pre-credit crunch world The Barclays boss has been a standout earner both as CEO and in his previous capacity as chief of Barclays Capital, the group’s investment banking subsidiary. He has emerged as a media poster child, regularly accused of rapacity and shameless self justification. In 2007, Diamond was reported to be taking home a pay packet worth £27m as boss of Barclays Capital, the investment banking business he had built up. News of the award triggered an outcry at a time when the implosion of Northern Rock had yet to bring the credit binge to a shuddering halt. Peter Mandelson, Tony Blair’s spindoctor-in-chief and then secretary of trade, described Diamond as “the unacceptable face of banking” — a bit rich from a man who likes to spend his summers on yachts owned by the wealthy. Diamond and his ilk have been accused of fuelling the excesses of an unsustainable boom.

However, Barclays actually did well for itself during the crash, snapping up the US operation of Lehman Brothers at a bargain basement price. Early last year, Diamond, now newly installed as Barclays boss, appeared before the House of Commons treasury committee and enraged MPs by suggesting it was time to move on and not linger on the role of the banks in the financial crisis. He talked of his modest Irish-American background as one of nine siblings. This tale of a self-made man cut little ice. Since then, he has rowed back and assumed a more penitent stance on the crisis, but this has done little to shake his reputation as a hugely successful “casino financier”. Diamond may use the language of contrition, but he has declined to budge on key fundamentals. He insists that in a global marketplace top salaries must be on offer to London-based masters of the financial universe if that city is to hold on to its lead position. He is also insistent that large banks should not be broken up, as some leading politicians have suggested. Barclays has, however, continued to shed staff, with 3,000 going in 2011, out of a roll of 145,000.

There are signs that key shareholders and their representative bodies have had enough of the Babylonian largesse on offer to the people charged with managing their investments. Ahead of the Barclays AGM on Apr 27, four leading institutional investors, Standard Life, Fidelity, Aviva, and Scottish Widows have signalled that they may either oppose the remuneration package, or will vote against the re-election of the chair of the remuneration committee. The dissidents are unlikely to win out against the massed proxies of the board. Diamond is a director of another key Barclays investor, Blackrock, and his achievements as head of Barclays Capital will also count in his favour. However, the National Association of Pension Funds and key industry bodies have signalled their unhappiness. Some would argue that such shareholder activism has been all too sporadic, with past efforts at sanction not bearing much in the way of tangible fruit. Indeed, the life and pensions industry stands in the dock accused of engaging in manager feather bedding at the expense of long-term saver-pensioner clients. The outcome of this altercation between Barclay investor and management should interest Irish investors, given the exposure of fund managers to FTSE 100 companies.

A redress in the balance of financial power between shareholder and professional manager is long overdue. According to David Paterson, head of Corporate Governance at the NAPF, “what is needed in the banking industry is a fundamental realignment of pay so that it truly reflects the balance of interests between providers of capital and management”. Diamond has insisted such a redressing of the balance is underway. Others disagree. Martin Wolf, for one, has expressed cynicism, in a recent Financial Times article, about Diamond’s protestation that banking is turning over a new leaf. Diamond has insisted no taxpayers’ money will ever again be put at risk by his industry. He has vowed to fire employees considered to have engaged in unbecoming behaviour such as the group of six who ran up a £44,000 wine bill at a London restaurant in 2004. Wolf wrote: “We need to see changes in how banks manage themselves.” Diamond has called on banks to boost their return on capital. Wolf profoundly disagrees: “Return on equity is the wrong target... over the past 10 to 15 years, it has helped to make many bankers rich, and loyal shareholders poor. It prompts banks to keep loss adjusting capital low.

This makes enterprises vulnerable and our financial system fragile.” Diamond has written that banks must increase profits in a way that creates sustainable value, but Wolf, the dean of UK financial journalism responds with little enthusiasm to such comments: “It all makes one feel all warm, does it not? So why am I cynical. I look at incentives and behaviour, not words.” When it comes to the acid test of commitment, a willingness to accept pay restraint, Diamond and other senior colleagues seem to live in a time capsule circa 2005. Perhaps they need reminding that all that glitters is not gold, and that with great privilege comes responsibility. Getting to know Bob Diamond * Born: US. Grew up in Massachusetts. * Education: Universityof Connecticut, MBA. Bob Diamond's resignation: the late exchanges that led to his demise | Business | The Guardian Bob Diamond Bob Diamond's resignation: the late exchanges that led to his demise Once the former Barclays chief executive realised he was the biggest problem facing the bank, it was time to go Bob Diamond resigned after working at Barclays for 16 years, building up the investment side of the bank.

Photograph: Dan Kitwood/Getty Images Close This article is 4 years old On Monday afternoon Bob Diamond rehearsed for his planned appearance before the Commons Treasury select committee. As his public relations team ran him through question after question that the MPs were likely to fire at him, the American born banker saw that he – and his brash personality – was the main problem facing Barclays bank. Diamond, 16 years at the bank, but only 18 months into his dream job as chief executive, spoke to a few close colleagues before setting off for home, knowing that David Cameron had used the revelations about Barclays' attempts to manipulate the London interbank offered rate (Libor) to call an inquiry into the wider banking industry. Though regulators admit that Barclays is only one of up to 20 banks caught up in the scandal, Diamond epitomised it. Diamond rang Barclays chairman Marcus Agius and told him it was time for him to go. It was a stunning change in stance from the defiant email to staff he had sent a few hours earlier, telling them he "loved Barclays" and was committed to putting right the wrongs exposed by regulators. Behind the scenes bigger forces were at work.

The regulators had watched the political temperature rising during the day and the Bank of England governor, Sir Mervyn King, and Lord Turner of the Financial Services Authority secretly met Agius, who had himself resigned only hours before, in the late afternoon. King would not comment but Turner said: "There were major challenges for Barclays in making sure they could convince people there had been a fundamental cultural change and we simply communicated to the board that these were issues they needed to think about. It was for them to agree whether they could achieve that degree of change under the current leadership." Agius was hastily reinstated, into a bigger job looking after the company until a new chief executive is appointed. He refused to comment, but it is clear that the words exchanged between the three top men were key. Diamond's days were numbered. Damaging emails published by regulators had shown traders promising to fix Libor at certain levels – so the bank could make extra profit – with quips such as "this one's for you big boy" and references to bottles of Bollinger champagne proving impossible to justify.

Then there was the confusion about whether, during the 2008 banking crisis, the bank had deliberately manipulated down the price of Libor in attempt to demonstrate to the outside world that it was not, in the words of one of the emails, "in the shit". Documents published ahead of the select committee hearing show Diamond's emailed note of his 29 October 2008 conversation with Paul Tucker, a deputy governor of the Bank of England. Addressed to the then-Barclays chief executive John Varley, and copied to Diamond's close lieutenant Jerry del Missier, it will be scrutinised by MPs. Del Missier used it as the basis to tell Barclays staff to reduce their Libor quotes. Del Missier, who was investigated by the FSA and cleared, also quit on Tuesday – a month after he was appointed the bank's chief operating officer. At the select committee Diamond is expected to say that he did not believe Tucker told him to cut Barclays' rates. During an emergency board meeting on Monday night the bank's non-executive directors had to take some quick decisions.

The board had intended the departure of Agius to take the heat off Diamond before his appearance at the select committee and give the board some breathing space to ensure there was a possible successor lined up to replace Diamond once the dust had settled. The plan backfired spectacularly. Agius, in a hastily convened conference call, said: "What I hoped to do was lower the temperature surrounding the bank but it became evident as Monday went on if anything the temperature rose." Within minutes of the announcement hitting the stock exchange on Monday, Labour leader Ed Miliband was on the sofa of ITV Daybreak calling for Diamond to go. Liberal Democrat peer Lord Oakeshott, never short of a scathing quote, particularly about Barclays, was quick to describe the departure of Agius as the equivalent of kicking out the passenger rather than the driver. "The board is so hopeless they've just shot the head of the firing squad and missed the prisoner," Oakeshott said. The government, under pressure to launch a fully-blown Leveson-style inquiry, used it as a moment to set Andrew Tyrie, chairman of the Treasury committee, the extra task of chairing a joint committee of MPs and Lords to investigate the banking industry.

When Diamond's resignation was announced at 7.30am on Tuesday – 30 minutes after the usual time for such announcements, the hastiness of the decision was evident. Agius had called the chancellor, George Osborne, in the early hours to tell him Diamond was going while he was taking over as full-time chairman to find a new chief executive. Osborne, in a Today programme interview shortly afterwards, said: "I think and I hope that it is the first step towards a new culture of responsibility in British banking." In a statement Diamond praised "an extraordinarily talented management team that I know is well placed to help the business emerge from this difficult period as one of the leaders in the global banking industry". But the reality is that the business he joined in 1997, and transformed into a powerhouse in investment banking on the world stage, is poised to undergo as radical an upheaval as the one he led in the go-go years before the 2008 banking crisis. One of nine children, Robert E Diamond – known internally as RED – grew up in Concord, Massachusetts. His parents were teachers, a career path he had intended to follow by starting out as a lecturer in management and organisation at the University of Connecticut.

After four years, in 1980, he ended up at Morgan Stanley, following a businessman who had mentored him, moving to Credit Suisse First Boston a decade later before arriving at Barclays in 1996. A sports fanatic – when he ran BarCap his glass cube office was full of sports memorabilia – he adopted Chelsea as his "soccer" team, becoming a regular visitor to their dressing room and presenter of trophies when the club won the premier league, sponsored by Barclays. He loves Boston Red Sox and American football team Patriots, and while his children – now adults – were young ran the little league football in Hyde Park, London. A keen skier and regular golfer and tennis player, he put his drive and energy into building BarCap into a major league player. It was he who boarded a flight to the US in mid-September 2008 with his close lieutenants to try to buy Lehman Brothers in the hours before it collapsed. While the collapse unleashed a wave of fear across global markets, it led to a massive opportunity for Diamond to buy just the Wall Street business and relocate back to his native America where his children were now studying after their early years at the American school in St John's Wood.

The BarCap culture – inside a bank whose roots have Quaker origins – always jarred with the staid high street banking business, but even in City cultures was regarded as a testosterone-charged, alpha-male environment – surprising perhaps for a man who in the past has used his fortune to sponsor a chair of women's studies at Colby College in Maine. The current controversy over Libor rates is the toughest reputation hit BarCap has had to take. But it is by no means the first. Lord Mandelson once described Diamond as the "unacceptable face" of banking. There were also the four traders who celebrated with a lavish £44,000 dinner at Petrus, Gordon Ramsay's restaurant; and the legal action against the Guardian to try to suppress details of tax avoidance schemes run by Barclays. Whistleblowers told the Guardian about poker games, a "cow eating club" and sackings inside the structured capital markets business inside BarCap.

More recently, there was the high profile decision to shut down two tax avoidance schemes submitted to HM Revenue & Customs by the bank, even before the bank revealed it had paid a £5.7m tax bill incurred by Diamond when he was relocated back from New York to London to become chief executive in January 2011. In his years at the bank Diamond transformed Barclays' disastrous investment bank BZW into a reborn Barclays Capital (BarCap) and rejuvenated the fund manager Barclays Global Investors (BGI), sold off during the banking crisis to bolster the bank's coffers. John-Paul Crutchley, banks analyst at UBS, said: "It is fair to say that there is no one individual who has imposed more of their vision, personality and character on a UK bank over the last decade than Bob Diamond at Barclays.

From the creation of BarCap in 1997 to the acquisition of Lehman's US business and the sale of BGI – all were driven by Bob Diamond." With banks analysts and shareholders now questioning the over-reliance of Barclays on investment banking, Agius was careful yesterday not to say that Diamond's departure – or that of del Missier – would mark the dismantling of an investment banking empire which began with "humble beginnings" in 1997. An exhausted Agius instead paid tribute to Diamond, saying he had "invigorated and focused the whole organisation" in his 18 months as chief executive. "We will miss his energy and vision," said Agius. Barclays boss Bob Diamond resigns amid Libor scandal - BBC News BBC News Barclays boss Bob Diamond resigns amid Libor scandal 3 July 2012 Close share panel Image caption Bob Diamond's severance package has not yet been decided, Barclays says Barclays chief executive Bob Diamond has resigned a week after the bank was fined a record amount for trying to manipulate inter-bank lending rates. BBC business editor Robert Peston said he was encouraged to go by the heads of the Bank of England and the FSA.

Mr Diamond said he was stepping down because the external pressure on the bank risked "damaging the franchise". Chief operating officer Jerry del Missier has also resigned, the third top executive in two days to do so. Barclays chairman Marcus Agius, who had announced his own resignation on Monday, will now take over the running of Barclays until a new chief executive is appointed. 'Cynical greed' BBC business editor Robert Peston said the heads of the City's two main regulators had been unable to force Mr Diamond out "because the recent FSA investigation into how Barclays attempted to rig the important Libor interest rates did not find him personally culpable". It is a soap opera like no other I can remember in my 30 years of reporting on the City By Robert PestonBusiness editor FSA boss slams 'greed' at banks "However, as a regulated institution, it was impossible for Barclays' board to ignore the revealed wishes of the two most powerful regulators in the City." Earlier, Lord Turner, the chairman of the Financial Services Authority, described the outrage that has built up over the bank's actions.

"The cynical greed of traders asking their colleagues to falsify their Libor submissions so that they could make bigger profits - has justifiably shocked and angered people, in particular when we are facing hard economic times provoked by the financial crisis," he told the Financial Services Authority's annual meeting. Committee appearance How Libor scandal developed Criminal charges: The problems Mr Diamond will still appear before MPs on the Treasury Committee on Wednesday to answer questions about the Libor affair. "I look forward to fulfilling my obligation to contribute to the Treasury Committee's enquiries related to the settlements that Barclays announced last week without my leadership in question," Mr Diamond said in a statement. He is expected to be questioned about a conversation he had with the deputy governor of the Bank of England, Paul Tucker, about Barclays' Libor submissions at the height of the credit crunch in 2008. Barclays' managers came to believe, after the conversation between Mr Diamond and Mr Tucker, that the Bank of England had sanctioned them to lie about what they were paying to borrow when providing data to the committees that set the Libor rate. Inquiry row Chancellor George Osborne welcomed Mr Diamond's departure and said he hoped it was the "first step towards a new culture of responsibility" in banking.

"It is the right decision for the country," Mr Osborne said, saying the UK needed a strong Barclays concentrating on lending and contributing to economic recovery. Labour leader Ed Miliband said it was "necessary and right" that Bob Diamond stepped down. "But this is about much more than one individual, it's about the culture and practices of the banking industry," he said. "That's why we need a full, judge-led, independent inquiry, to get to the bottom of those practices and make recommendations for change in the future. We've had missed opportunities before, we've got to seize this moment." Labour is critical of the government's decision to call a parliamentary inquiry, chaired by the head of the Treasury Committee, Andrew Tyrie MP, rather than a full Leveson-style inquiry, independent of politicians. Big pay-off? Last week, regulators in the US and UK fined Barclays £290m ($450m) for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other, which underpin trillions of pounds worth of financial transactions.

Libor is to banking what the Millie Dowler case was to phone hacking By Nick RobinsonPolitical editor Labour 'must see sense on banks' Staff did this over a number of years, trying to raise them for profit and then, during the financial crisis, lowering them to hide the level to which Barclays was under financial stress. Mr Diamond is one of the UK's highest paid chief executives, earning £20m last year, and was described as "the unacceptable face" of banking by the then business secretary Lord Mandelson in 2010. The details of any severance package are not yet known, but former City minister Lord Myners suggests it could add up to £20m-£30m. "I think his resignation letter is drafted with an eye to that [pay-off], because he admits no guilt on his part at all," the Labour peer told BBC News. "The shareholders of Barclays will be expecting the board to ensure that not a penny more is paid to Bob Diamond than that to which he is legally entitled," he said. US-born Mr Diamond was head of Barclays Capital, its investment bank division, when its staff were trying to manipulate the key inter-bank rates.

"He maintains that he didn't know what was going on," says Robert Peston. Investigations are continuing in the UK and the US into other banks over Libor fixing, including criminal investigations by the Department of Justice. The Serious Fraud Office in the UK is looking into possible criminal prosecutions. Barclays boss Bob Diamond resigns amid Libor scandal - BBC News BBC News Barclays boss Bob Diamond resigns amid Libor scandal 3 July 2012 Close share panel Image caption Bob Diamond's severance package has not yet been decided, Barclays says Barclays chief executive Bob Diamond has resigned a week after the bank was fined a record amount for trying to manipulate inter-bank lending rates. BBC business editor Robert Peston said he was encouraged to go by the heads of the Bank of England and the FSA. Mr Diamond said he was stepping down because the external pressure on the bank risked "damaging the franchise". Chief operating officer Jerry del Missier has also resigned, the third top executive in two days to do so. Barclays chairman Marcus Agius, who had announced his own resignation on Monday, will now take over the running of Barclays until a new chief executive is appointed.

'Cynical greed' BBC business editor Robert Peston said the heads of the City's two main regulators had been unable to force Mr Diamond out "because the recent FSA investigation into how Barclays attempted to rig the important Libor interest rates did not find him personally culpable". It is a soap opera like no other I can remember in my 30 years of reporting on the City By Robert PestonBusiness editor FSA boss slams 'greed' at banks "However, as a regulated institution, it was impossible for Barclays' board to ignore the revealed wishes of the two most powerful regulators in the City." Earlier, Lord Turner, the chairman of the Financial Services Authority, described the outrage that has built up over the bank's actions. "The cynical greed of traders asking their colleagues to falsify their Libor submissions so that they could make bigger profits - has justifiably shocked and angered people, in particular when we are facing hard economic times provoked by the financial crisis," he told the Financial Services Authority's annual meeting. Committee appearance How Libor scandal developed Criminal charges: The problems Mr Diamond will still appear before MPs on the Treasury Committee on Wednesday to answer questions about the Libor affair.

"I look forward to fulfilling my obligation to contribute to the Treasury Committee's enquiries related to the settlements that Barclays announced last week without my leadership in question," Mr Diamond said in a statement. He is expected to be questioned about a conversation he had with the deputy governor of the Bank of England, Paul Tucker, about Barclays' Libor submissions at the height of the credit crunch in 2008. Barclays' managers came to believe, after the conversation between Mr Diamond and Mr Tucker, that the Bank of England had sanctioned them to lie about what they were paying to borrow when providing data to the committees that set the Libor rate. Inquiry row Chancellor George Osborne welcomed Mr Diamond's departure and said he hoped it was the "first step towards a new culture of responsibility" in banking. "It is the right decision for the country," Mr Osborne said, saying the UK needed a strong Barclays concentrating on lending and contributing to economic recovery. Labour leader Ed Miliband said it was "necessary and right" that Bob Diamond stepped down. "But this is about much more than one individual, it's about the culture and practices of the banking industry," he said.

"That's why we need a full, judge-led, independent inquiry, to get to the bottom of those practices and make recommendations for change in the future. We've had missed opportunities before, we've got to seize this moment." Labour is critical of the government's decision to call a parliamentary inquiry, chaired by the head of the Treasury Committee, Andrew Tyrie MP, rather than a full Leveson-style inquiry, independent of politicians. Big pay-off? Last week, regulators in the US and UK fined Barclays £290m ($450m) for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other, which underpin trillions of pounds worth of financial transactions. Libor is to banking what the Millie Dowler case was to phone hacking By Nick RobinsonPolitical editor Labour 'must see sense on banks' Staff did this over a number of years, trying to raise them for profit and then, during the financial crisis, lowering them to hide the level to which Barclays was under financial stress.

Mr Diamond is one of the UK's highest paid chief executives, earning £20m last year, and was described as "the unacceptable face" of banking by the then business secretary Lord Mandelson in 2010. The details of any severance package are not yet known, but former City minister Lord Myners suggests it could add up to £20m-£30m. "I think his resignation letter is drafted with an eye to that [pay-off], because he admits no guilt on his part at all," the Labour peer told BBC News. "The shareholders of Barclays will be expecting the board to ensure that not a penny more is paid to Bob Diamond than that to which he is legally entitled," he said. US-born Mr Diamond was head of Barclays Capital, its investment bank division, when its staff were trying to manipulate the key inter-bank rates. "He maintains that he didn't know what was going on," says Robert Peston. Investigations are continuing in the UK and the US into other banks over Libor fixing, including criminal investigations by the Department of Justice. The Serious Fraud Office in the UK is looking into possible criminal prosecutions.

Barclays bank scandal stirs up Colby College | BDN Maine | Bangor Daily News Barclays bank scandal stirs up Colby College The Diamond Building is seen on Colby College's campus in July 2012. Buy Photo Virginia Mayo | AP By Michael McDonald, Bloomberg News Nov. 14, 2012, at 2:25 p.m. WATERVILLE, Maine — Robert Diamond, the former Barclays chief, gave $6 million to finance a Colby College building that has become a focal point for student dissent over his role at the 199-year-old school. Diamond, class of ’73, was forced out at Barclays after the London-based bank admitted to manipulating a key lending rate affecting $300 trillion in finance products worldwide. Since Colby trustees backed him as chairman in August, a group of students and local activists has rallied outside the Diamond Building to call for his removal. “It’s not just what Bob Diamond stands for,” said Gordon Fischer, a Colby senior from Camden, who has helped set up protests, including one that attracted more than 30 people on Nov. 11.

“It’s how the decision was made by the board to strongly affirm their support for him.” The market crisis that led to the longest recession since World War II highlighted a cozy relationship between academia and Wall Street. College presidents such as Brown University’s Ruth Simmons served as paid bank directors while academics failed to reveal industry support for research backing deregulation. As campus protests focused on financiers, leaders including Harvard President Drew Faust urged graduates to resist the lure of banking and investment jobs. Yet executives who’ve been tarnished by scandal are rarely forced to cut ties with schools and nonprofit organizations they’ve supported, said Stanley Katz, a professor of public and international affairs at Princeton University. Usually a trustee caught up in such situations simply isn’t re-elected, Katz said. “There’s a big gap between that and forcing a person off the board,” Katz said. “What you’re relying on is the common sense of the guy to throw himself overboard in the best interest of the organization. At some point you’re doing more harm than good.” Richard Fuld, the former head of Lehman Brothers Holdings Inc. in New York, is an example.

He quit as a trustee of Vermont’s Middlebury College after Lehman went bankrupt in September 2008, upending credit markets worldwide. Under Diamond, 61, Barclays employees tried to rig the London interbank offered rate, or Libor, a global benchmark for lenders, credit providers and an array of financial agreements. Britain’s second-largest bank by assets, Barclays paid a fine of $460 million for the attempted manipulation, which began in 2005. Diamond joined the bank in 1996 and rose to CEO after running the investment banking unit for about 13 years. The ex-banker, who hasn’t been accused of wrongdoing, didn’t respond to emailed messages seeking comment on his status at Colby. “If you force a guy like Bob off, what happens to the next person who does something that offends the students?” Katz said. “Until it comes to an indictment, people aren’t going to ask him to step down.” As he rose from trader to Barclays CEO, Diamond helped make the bank the world’s second-biggest securities underwriter last year.

Yet Adair Turner, chief of Britain’s Financial Services Authority, in July faulted him for fostering a “cultural tendency to be always pushing the limit” of the rules. “Diamond did stuff during the crisis to rescue the bank,” said Christopher Wheeler, a Mediobanca analyst in London. “Unfortunately, he is tainted, because Libor is one of the ugliest things I’ve seen in 40 years in and around the industry.” To set Libor, traders at certain banks are surveyed about their cost of lending to other banks and financial institutions each business day, with the results used to set the rate. Participants who conspired to manipulate the calculation through their responses sought to improve trading profits and to make their firms look financially healthier. The manipulation remains under investigation, including U.K. and U.S. criminal probes. Barclays was the first to admit its role in the Libor scandal in June and Diamond left days later. By then he was already a poster boy for banker bashing in London. British Business Secretary Peter Mandelson in 2010 labeled him the “unacceptable face of banking” because of his outsized pay.

Last year, Diamond told Parliament that the time for “remorse and apology” from bankers regarding the financial crisis needed to end so that they could focus on helping the economic recovery. The banker set off a furor after he resigned in July by telling a parliamentary panel that only a few traders were responsible for the rate rigging and that regulators were content with leadership at Barclays. A Treasury Committee report to lawmakers in August said he gave “unforthcoming and highly selective” evidence about the role of top managers and that his candor and frankness “fell well short of the standard that Parliament expects.” Diamond defended his answers as truthful and candid in a statement issued following the report. “He is totally unfit to be involved with any college,” John Mann, a Labour Party member of Parliament on the Treasury Committee, said by email about the Colby protests. “The man was roundly condemned by our committee for his answers. We had the impression he was dishonest with us.” Started as a Baptist seminary on the banks of the Kennebec River, a major fur-trading route in colonial days and a channel for logs sent to mills in Waterville, Colby is readying a bicentennial celebration next year.

It has evolved into a selective liberal-arts school located about 180 miles north of Boston. Colby, which costs about $55,700 a year to attend, admitted about one in four applicants this year and has 1,815 students from 46 U.S. states and 76 countries, according to its website. Besides Diamond, graduates include historian Doris Kearns Goodwin and Federal Reserve Bank of Boston President Eric Rosengren. A second generation Irish-American who was raised in the Boston suburb of Concord, Diamond has been a Colby trustee since 1993 and chairman since 2009. He has committed to giving more than $11 million to the school during the past 20 years. The $6 million for the Diamond Building, which houses social sciences departments, including economics, was among the largest donations ever received by the college when it arrived in 2003. Diamond also helped Colby students get jobs on Wall Street as Barclays recruited from the campus, said Peyton McElyea, a 2005 graduate who worked for the firm for three years out of college.

“People don’t realize how wonderful Bob has been,” said McElyea, who left Barclays to get a masters of business administration at Columbia University and now works for EVOQ Properties Inc., a private-equity firm in Los Angeles. “He started dozens of meaningful banking careers for students who otherwise might not have landed the same opportunities.” Colby’s trustees met in August to hear out Diamond on his departure from Barclays. After he finished and left the room, the board conferred on the matter for two hours before it “strongly affirmed its support” of him as chairman, according to a statement Sally Baker, a school spokeswoman, sent to students and faculty. In his presentation, the ex-banker showed “official reports reflecting that an intensive, multiyear investigation of Barclays by several regulatory agencies resulted in no findings of impropriety against Mr. Diamond personally,” according to the statement. It said Diamond asked for the board meeting. The Fed’s Rosengren, also a Colby trustee, said by email that he didn’t attend the meeting and has recused himself from any discussions about Diamond.

The first protest against Diamond’s continuing role took place July 14, when about 15 activists from the Occupy Wall Street movement in Maine gathered in front of the Diamond Building. The activists returned on Sept. 12, joined by students, and again on Oct. 20, when more than 40 protesters circulated a petition calling for his ouster on a day when trustees gathered on the campus. “The board is still strong in their support,” said Michael Kiser, a Colby spokesman. Given the relatively small number of students involved, “it’s not really accurate to call it a student protest,” he said. “They’re welcome to their opinions,” Kiser said. “We understand there’s a difference of opinion and we’re respectful of that.” Fischer and another student protester, Shelby O’Neill, were asked to meet with two trustees on Oct. 20, after which a dispute arose over whether the college had agreed on a campus- wide forum about Diamond’s future role. The disagreement shows that Colby’s leaders don’t want to confront questions about Diamond and has added “fuel to the fire,” Fischer said.

“He’s a very generous guy, but where did that money come from?” said Gary Lawless, a poet and a 1973 Colby graduate who runs a bookstore in Brunswick, Maine, near the mouth of the Kennebec. “The college is saying that if you don’t get indicted, it’s OK.” With assistance from Howard Mustoe in London. Barclays chief Bob Diamond resigns in wake of bank rate-rigging scandal - Birmingham Post Barclays chief Bob Diamond resigns in wake of bank rate-rigging scandal 08:37, 3 Jul 2012 Barclays chief executive Bob Diamond has resigned in the wake of the rate-rigging scandal. Share Get daily news by email Bob Diamond Barclays chief executive Bob Diamond resigned with immediate effect today (Tuesday) in the wake of the rate-rigging scandal.

The American banker, who has faced mounting calls to step down, said: "The external pressure placed on Barclays has reached a level that risks damaging the franchise." He added: "I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth." The move comes after Barclays was fined £290 million by UK and US regulators for manipulating the Libor, the rate at which banks lend to each other. Chairman Marcus Agius, who announced his intention to resign over the affair on Monday, will lead the search for a new chief executive immediately, Barclays said. Mr Diamond, who was once dubbed the "unacceptable face of banking" by Lord Mandelson, showed no sign of stepping down yesterday as he pledged to see an internal review into Barclays' practices through to implementation. The 60-year-old, who joined the bank 16 years ago, said: "My motivation has always been to do what I believed to be in the best interests of Barclays.

No decision over that period was as hard as the one that I make now to stand down as chief executive." He went on: "I know that each and every one of the people at Barclays works hard every day to serve our customers and clients. That is how we support economic growth and the communities in which we live and work." Mr Diamond confirmed he would still appear before the Treasury Select Committee tomorrow to answer questions over the rate-fixing allegations which ultimately led to the Government launching a parliamentary probe into banking culture. He added: "I leave behind an extraordinarily talented management team that I know is well placed to help the business emerge from this difficult period as one of the leaders in the global banking industry." Mr Agius, who will become full-time chairman until he steps down at an unspecified date, said: "Bob Diamond has made an enormous contribution to Barclays over the last 16 years of distinguished service to the group, building Barclays Investment Bank into one of the leading global investment banks in the world. "As chief executive he has led the bank superbly." As he resigned on Monday, Mr Agius announced an internal review into the bank's "flawed" practices.

Mr Diamond, who has courted controversy for his hefty pay packages, which in 2011 alone totalled close to £18 million, told employees in a letter: "I am committed to ensuring the recommendations of this review are implemented in full." The memo emerged after the Serious Fraud Office said it hoped to decide within a month on whether a criminal prosecution in relation to the rate-fixing was appropriate. But despite his attempts to rally staff, Mr Diamond faced increasing calls from politicians, financial campaigners and former Barclays directors to follow Mr Agius and step down. Labour leader Ed Miliband had said the resignation of Mr Agius from Barclays was not enough and on Mopday repeated his call for Mr Diamond to step down. He added: "I want to see criminal sanctions against those who broke the law." The Bank of England was also drawn into the affair after it emerged that staff mistakenly thought they were instructed by the central bank to lie in their rate submissions. The Financial Services Authority's report said there had been a misunderstanding arising from a conversation between Bank Deputy Governor Paul Tucker, a favourite for the Governor role, and an unidentified senior Barclays manager on October 29 2008.

Chancellor George Osborne welcomed the resignation of Mr Diamond, saying it was the "right decision" for the bank and for the country. Mr Osborne said the had been informed of the decision on Sunday night by Mr Agius. "He said the board had come to view that that was the right decision and Mr Diamond had come to that view," he told the BBC Radio 4 Today programme. "But I think it is the right decision for Barclays, I think it is the right decision for the country." ?Next page: Barclays statement in full Here is Barclays' statement on Bob Diamond's resignation in full: "Barclays today announces the resignation of Bob Diamond as chief executive and a director of Barclays with immediate effect. "Marcus Agius will become full-time chairman and will lead the search for a new chief executive. "Marcus will chair the Barclays Executive Committee pending the appointment of a new chief executive and he will be supported in discharging these responsibilities by Sir Michael Rake, deputy chairman. "The search for a new chief executive will commence immediately and will consider both internal and external candidates.

The businesses will continue to be managed by the existing leadership teams." Mr Diamond said: "I joined Barclays 16 years ago because I saw an opportunity to build a world-class investment banking business. "Since then, I have had the privilege of working with some of the most talented, client-focused and diligent people that I have ever come across. "We built world-class businesses together and added our own distinctive chapter to the long and proud history of Barclays. My motivation has always been to do what I believed to be in the best interests of Barclays. "No decision over that period was as hard as the one that I make now to stand down as chief executive. The external pressure placed on Barclays has reached a level that risks damaging the franchise - I cannot let that happen. "I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth. "I know that each and every one of the people at Barclays works hard every day to serve our customers and clients. That is how we support economic growth and the communities in which we live and work. "I look forward to fulfilling my obligation to contribute to the Treasury Committee's inquiries related to the settlements that Barclays announced last week without my leadership in question.

"I leave behind an extraordinarily talented management team that I know is well placed to help the business emerge from this difficult period as one of the leaders in the global banking industry." Mr Agius said: "Bob Diamond has made an enormous contribution to Barclays over the last 16 years of distinguished service to the group, building Barclays Investment Bank into one of the leading global investment banks in the world. "As chief executive he has led the bank superbly. I look forward to working closely with the chief executives of our businesses and the other members of the executive committee in leading Barclays world-class businesses in serving our customers and clients and delivering value for our shareholders." ? TIMELINE: BOB DIAMOND'S DOWNFALL * Wednesday June 27: The banking industry is engulfed in a fresh scandal after Barclays pays £290 million to settle claims that it used underhand tactics to try to rig financial markets. The penalties from UK and US regulators, including a record £59.5 million fine from the Financial Services Authority (FSA), follow allegations it manipulated Libor and Euribor interbank lending, which govern the rates at which banks are prepared to lend to each other in the wholesale money markets.

In the depths of the financial crisis, Barclays gave false information about the interest rates it had to pay to borrow money in an effort to paint a false picture of its health to markets. Chief executive Bob Diamond, who was in charge of Barclays Capital at the time the breaches occurred between 2005 and 2009, apologises and says he and three other key executives would waive their bonuses for this year. * Thursday June 28: After fining Barclays, the FSA is investigating several other lenders including HSBC and taxpayer-backed Royal Bank of Scotland. Serious Fraud Office investigators are in talks with the FSA over the scandal while pressure is mounting on Mr Diamond to stand down. * Friday June 29: A fresh mis-selling scandal caps a nightmare week for the banking industry, as the FSA announces it has found "serious failings" in the sale of complex interest rate hedging products to some small and medium-sized businesses (SMEs). It reaches agreement with Barclays, HSBC, Lloyds and RBS to provide appropriate compensation where mis-selling occurred.

* Saturday June 30: An urgent independent review into the inter-bank lending rate is to be set up by the Government in the wake of the interest rigging scandal. The review will consider the future operation of the Libor rate and the possibility of introducing criminal sanctions, a Treasury source says. Mr Diamond is summoned to appear before the Treasury Select Committee next Wednesday. * Sunday July 1: Barclays Bank chairman Marcus Agius is reported to be on the brink of stepping down. The development comes as Business Secretary Vince Cable backs calls for a criminal investigation into bankers involved in the affair. * Monday July 2:

Question: Which former Chief Executive of Barclays Bank did Peter Mandelson call 'The Unacceptable Face of Banking'?
Answer: BOB DIAMOND